The Cova Customs Team monitors legislative updates and changes to South African and global trade legislation where it may impact South African business, on a regular basis. Our highlights appear below, with an option for greater detail, should any of these be specific to your business.

Changes to customs tariffs: Proposed changes to amend the Customs tariff to provide for duty relief or protection (with due dates for comments):
  • No proposed changes.
SARS customs administration updates:
  • Correction of Schedule 4 to reflect correct form (TC-01, not DA 331), which is a traveller card used at ports of entry to declare personal and household effects.
SARS customs updates: Trade updates: Additional details of each of the above items appear below, together with links to the relevant documents.

For more details, please contact us on customsupdates@cova-advisory.co.za.

Implemented changes

In terms of duty phase-downs under the trade agreement with the EU, the customs duty on various categories of fish will be phased down


Amendment to Part 1 of Schedule No. 1:
Fish classifiable in tariff subheadings 0302.13, 0302.14, 0303.14 and 0305.41, is reduced to a preference margin of 17% of the most favoured nation (MFN) rate of duty; and fish in Chapters 3 and 16 in Section A, is reduced to a preference margin of 50% of the MFN rate of duty.

Where the rate is 15%, it will be reduced to 12.5% and where the rate is currently 8.25% it will be reduced to 4.25%.

Government Gazette No. 42850, published on 22 November 2019
With effect from 1 January 2020
Notice available here.

Insertion of abbreviation and symbol in Schedule 1 Part 1 for carbon dioxide (CO²) to align with the Carbon Tax Act

Amendment of General Note G to Schedule No. 1 to insert the abbreviation and symbol:

This change is to align the terminology in the Customs Act with the Carbon Tax Act wherein the base of the carbon tax is expressed as the carbon dioxide (CO²) equivalent of such emissions.

The changes are therefore as follows:
  • General Note G to Schedule No.1 is amended to insert the abbreviation and symbol “CO²e” to mean CO² equivalent.
  • Note G is amended to insert Note G.12; and;
  • Notes G.12 to G. 53 are renumbered to read as Notes G.13 to G.54. The abbreviation of “t” as currently contained in General Note G is expanded to read as ton/tonne. The tonne is amended to align with the wording within the Carbon Tax Act.
Government Gazette No. 42850 Notice No. R.1515 published on 22 November 2019
With effect from 1 January 2020
Notice available here.

Four additional tariff subheadings to be implemented from 1 January 2020 to allow for closer monitoring of imports and exports

  • Footwear:
Request from the South African Footwear and Leather Industries Association for the creation of separate tariff subheadings for footwear classifiable in Chapter 64.



  • Particleboard, medium density fibreboard (MDF) and surface-decorated paper:
Request from PG Bison (Pty) Ltd for the creation of new tariff subheadings for products classifiable in tariff subheadings 4410.11, 4411.12, 4411.13 and 4811.59. These products are predominantly used in the construction and furniture sector.



  • Rooibos tea:
Requests from the Western Cape Tourism, Trade and Investment Promotion Agency (WESGRO) for the creation of separate tariff subheadings for Rooibos tea. The Western Cape Government and the South African Rooibos Council (SARC) are requesting the creation of separate tariff subheadings for dried leaves, stems or extract from Aspalathus linearis, known as Rooibos tea leaves. The products in question are currently classifiable in tariff subheading 1212.99.



  • Pecan nuts:
The Department of Economic Development in the Northern Cape is working with the South African Pecan Nut Producers Association (SAPPA) to develop a strategy to grow the exports of pecan nuts. SAPPA requested the creation of separate 8-digit tariff subheading for pecan nuts, classified in tariff subheading 0802.90.

Government Gazette No. 42850 Notice No. R.1516 published on 22 November 2019
With effect from 1 January 2020
Notice available here.

New name: Department of Agriculture, Land Reform and Rural Development

The Department of Agriculture, Forestry and Fisheries and the Department of Rural Development and Land Reform were merged to form the Department of Agriculture, Land Reform and Rural Development. As a consequence, the schedules to the Customs Act have been amended to reflect this. The Schedules affected are Schedule 1 Part 1 and Schedule 4.

Government Gazette No. 42850 Notice No. R.1517,1519, 1522 published on 22 November 2019
With effect from 1 January 2020

Links:

Two-way radios excluded from Ad Valorem duty (retrospective effect)

Amendment to Part 1 and Part 2B of Schedule No. 1 by the substitution of radio item 8517.62.20 in order to rectify the classification with the insertion of the words “excluding two-way radio”. This represents a refund opportunity for this duty, which was 9%.

Government Gazette No. 42450 Notice No.R1523 and R1524 published on 22 November 2019
With retrospective effect from 1 April 2018
Notice available here.

Deletion of redundant rebate and refund items


Amendment of schedule No.5:

Refund items 537.00 and 537.02/87.00/01.02 are being deleted, as they were applicable to the Motor Industry Development Programme (MIDP) which was replaced with the Automotive Production and Development Programme (APDP) that came into effect on the 1st of January 2013. Refunds in terms of the MIDP were made valid after the introduction of APDP, but only until 31 December 2018. Thus, refund items 537.00 and 537.02/87.00/01.02 were not immediately removed from the Schedules of the Act.

Government Gazette No. 42450 Notice No. R1520 published on 22 November 2019
With effect from 1 January 2020
Notice available here.

Amendment of schedule No.6:

Rebate items 672.01, 672.01/105.10/01.01 (Fuel supplied by Petroleum Oil & Gas Corporation of South Africa) and 672.01/105.10/02.01 (Fuel supplied by Sasol Oil (Pty) Limited for the secondary line-fill of the NMPP) are being deleted as they have become redundant. The new multi-purpose products pipeline government project was in place until 31 March 2012.

Government Gazette No. 42850 Notice No. R1521 published on 22 November 2019
With effect from 1 January 2020
Notice available here.

SARS Customs Administration Changes

Correction of reference to form in Schedule 4 (traveler card)

Note 5 in Schedule No. 4 is being amended to substitute the reference to form DA 331, which was replaced with form TC-01 as published in Government Gazette No. 35259 dated 20 April 2012.

Form TC-01 is a traveller card used by travellers at ports of entry to declare personal and household effects. Note 5 in Schedule No. 4 is amended to read as follows:

5. For the purposes of items 409.00, 480.00 and 490.00: (a) Where any goods or vehicles are imported or re-imported, as the case may be, in terms of these items by a person who is required to declare goods in terms of section 15, that person means a "traveller" as defined in the rules for that section and as contemplated in form TC-01; and (b) in addition to the Notes to these items, such a traveller must comply with the requirements of section 15, the rules for that section and form TC-01.

With effect from 1 January 2020.
Government Gazette No.42850 Notice No. R.1518
Notice available here.

SARS Customs Updates

Registration, Licensing and Accreditation (RLA) update

This was postponed from 2019 and will be rolled out early in 2020. In summary, RLA will allow for online submission of certain customs registration types. Excise is excluded.
Carbon tax customs registrations are to be rolled out in January and February: the SARS website has now been updated to give a summary of Carbon Tax. This is as follows:

What is the Carbon Tax (CBT)?
The CBT is a new tax in response to climate change, which is aimed at reducing greenhouse gas (GHG) emissions in a sustainable, cost effective and affordable manner.

The Carbon Tax gives effect to the polluter-pays-principle, and helps to ensure that firms and consumers take the negative adverse costs (externalities) of climate change into account in their future production, consumption and investment decisions.

When was CBT implemented?
The Carbon Tax Act of 2019 came into effect on 1 June 2019. It will be administered and collected by SARS.

The CBT is assessed, collected and enforced as an environmental levy in terms of the Customs and Excise Act, 1964, read with the relevant provisions of the Carbon Tax Act, 2019.

Link: https://www.sars.gov.za/ClientSegments/Customs-Excise/Excise/Environmental-Levy-Products/Pages/Carbon-Tax.aspx

Tax Clearance Certificate (TCC) no longer issued

From 2 November 2019, SARS stopped issuing printed TCCs. Instead, taxpayers are to provide a PIN enabling online access to the TCC. Cova has requested that the SARS Customs Registration department advises what will be accepted when submitting manual customs registration applications. Previously, this document was required to be submitted as proof of tax registrations such as Income Tax, VAT, PAYE. It is unclear whether a PIN would be accepted by the processing/submission counters at this time.
We will keep you updated once we have received feedback from SARS Customs.

Link: https://www.sars.gov.za/ClientSegments/Individuals/TCS/Pages/default.aspx

Tax-related bills passed at National Assembly on Tuesday 26 November 2019

These will now be passed on to the National Council of Provinces for concurrence. There are three bills:
  • Rates and Monetary Amounts and Amendment of Revenue Laws Bill
  • Taxation Laws Amendment Bill
  • Tax Administration Laws Amendment Bill
Link: https://www.sars.gov.za/Legal/Preparation-of-Legislation/Pages/Bills.aspx

Trade updates

Government focusses on Special Economic Zones (SEZs)

The Tshwane Automotive Hub was recently officially opened by the President.

As with the opening of Mara Phones at Dube Tradeport, this once again signals Government’s strong intention to use SEZs to aid economic growth and to attract investors. Those companies that are interested in SEZs as a concept and as a potential location for manufacturing activities are advised to speak to Cova to understand all available incentives.
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